Wednesday, July 15, 2009

Today the market rallied off yesterday's triangle but more than expected and with higher volume than the previous two days. There are still various counts but the X wave high was exceeded today giving doubts about the head and shoulders pattern playing out. It is still possible but not as likely.

Dan posted a chart summing up the past few weeks. The WXY double zigzag fits in a channel nicely and the waves are well proportioned. This pattern just makes sense.

There are various counts for today's rally but it does appear to be (v) of [iii] that has completed or is completing. The wave is very extended already but may have some small upside remaining. The [iii] wave retracement should end around 920-910, that is 23.6%-38.2%. 905 is the [B][D] triangle resistance line as charted yesterday. This pullback should set the stage for [v].

After [v] completes there will be a complete 5 wave pattern, probably wave 1. This may actually end up being the 'c' wave of X as an expanding flat however. The retracement of the possible 1 wave will be telling. Obviously moving below 869.32 means 1 was not 1. For now the market does appear impulsive to the upside, it will probably be days from now before that has a chance to be refuted.

Problems:[i] looks more like a zigzag and was retraced heavily. But it seems too small to be an 'a' wave.

Alternatives:The triangle yesterday was a 'b' wave of something.

Perhaps the X wave is not complete but is an expanding flat forming.

A triple zigzag is forming.

A different impilsive count covering the last several days for example (iv) of [iii] may actually be [iv].

Today the market rallied off yesterday's triangle but more than expected and with higher volume than the previous two days. There are still various counts but the X wave high was exceeded today giving doubts about the head and shoulders pattern playing out. It is still possible but not as likely.

Dan posted a chart summing up the past few weeks. The WXY double zigzag fits in a channel nicely and the waves are well proportioned. This pattern just makes sense.

There are various counts for today's rally but it does appear to be (v) of [iii] that has completed or is completing. The wave is very extended already but may have some small upside remaining. The [iii] wave retracement should end around 920-910, that is 23.6%-38.2%. 905 is the [B][D] triangle resistance line as charted yesterday. This pullback should set the stage for [v].

After [v] completes there will be a complete 5 wave pattern, probably wave 1. This may actually end up being the 'c' wave of X as an expanding flat however. The retracement of the possible 1 wave will be telling. Obviously moving below 869.32 means 1 was not 1. For now the market does appear impulsive to the upside, it will probably be days from now before that has a chance to be refuted.

Problems:[i] looks more like a zigzag and was retraced heavily. But it seems too small to be an 'a' wave.

Alternatives:The triangle yesterday was a 'b' wave of something.

Perhaps the X wave is not complete but is an expanding flat forming.

A triple zigzag is forming.

A different impilsive count covering the last several days for example (iv) of [iii] may actually be [iv].

My trading philosophy is 95% based on my own Elliott Wave analysis of the S&P 500. I try to keep my analysis and trading as simple as possible and do not use trend lines, channels, or definite retracement, price, or time targets. To me, inspecting the proportionality and symmetry of a market's price structure is the key to mastering the principle; it is through this that low-risk, high-reward trading opportunities are found.

Because they are the only things I look at when trading, the quality of the charts I post on this blog are very important to me. I think you will find my work to be the best Elliott Wave analysis of the S&P 500 on the internet.